Add in that Amazon is diluting shareholders by one percent in the last twelve months, versus Macy's which is returning capital through dividends and
share repurchases at a rate of twelve percent, and you get a complete picture of why Macy's looks attractive to a value investor.
A Reuters analysis shows that many companies are barreling down the same road, spending on
share repurchases at a far faster pace than they are investing in long - term growth through research and development and other forms of capital spending.
In my previous post, I highlighted I was pleasantly surprised by their 22 million
share repurchase at end - 2010, considering how unimpressive management has been otherwise.
Yes, a buyback kills two birds with one stone — regardless of the estate situation,
share repurchase at this kind of discount to underlying intrinsic value is a pretty compelling proposition.
Not exact matches
Fields, who earned $ 22.1 million in 2016, also faced a clamor for
share repurchases, which boost the value of stock,
at Ford's annual meeting earlier this month.
Jim Cramer highlights large
share repurchase programs
at Apple, Boeing and others in a market that's grown sour on buybacks.
Capacity remaining under the existing
share repurchase authorization was $ 4.206 billion
at the end of the quarter.
The Company
repurchased 2.8 million
shares during the first quarter
at an average price of $ 142.19 per
share for a total cost of $ 401 million.
From the inception of our Stock
Repurchase Program through April 27, 2018, we
repurchased approximately 23.7 million
shares of our common stock
at an aggregate market value of approximately $ 1.5 billion.
Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which United Technologies and Rockwell Collins operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters and the financial condition of our customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; (3) the scope, nature, impact or timing of acquisition and divestiture or restructuring activity, including the pending acquisition of Rockwell Collins, including among other things integration of acquired businesses into United Technologies» existing businesses and realization of synergies and opportunities for growth and innovation; (4) future timing and levels of indebtedness, including indebtedness expected to be incurred by United Technologies in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition; (5) future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope of future
repurchases of United Technologies» common stock, which may be suspended
at any time due to various factors, including market conditions and the level of other investing activities and uses of cash, including in connection with the proposed acquisition of Rockwell; (7) delays and disruption in delivery of materials and services from suppliers; (8) company and customer - directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (9) new business and investment opportunities; (10) our ability to realize the intended benefits of organizational changes; (11) the anticipated benefits of diversification and balance of operations across product lines, regions and industries; (12) the outcome of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact of the negotiation of collective bargaining agreements and labor disputes; (15) the effect of changes in political conditions in the U.S. and other countries in which United Technologies and Rockwell Collins operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; (16) the effect of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory (including among other things import / export) and other laws and regulations in the U.S. and other countries in which United Technologies and Rockwell Collins operate; (17) the ability of United Technologies and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger) and to satisfy the other conditions to the closing of the pending acquisition on a timely basis or
at all; (18) the occurrence of events that may give rise to a right of one or both of United Technologies or Rockwell Collins to terminate the merger agreement, including in circumstances that might require Rockwell Collins to pay a termination fee of $ 695 million to United Technologies or $ 50 million of expense reimbursement; (19) negative effects of the announcement or the completion of the merger on the market price of United Technologies» and / or Rockwell Collins» common stock and / or on their respective financial performance; (20) risks related to Rockwell Collins and United Technologies being restricted in their operation of their businesses while the merger agreement is in effect; (21) risks relating to the value of the United Technologies»
shares to be issued in connection with the pending Rockwell acquisition, significant merger costs and / or unknown liabilities; (22) risks associated with third party contracts containing consent and / or other provisions that may be triggered by the Rockwell merger agreement; (23) risks associated with merger - related litigation or appraisal proceedings; and (24) the ability of United Technologies and Rockwell Collins, or the combined company, to retain and hire key personnel.
Jim Cramer highlights
share repurchase programs
at Apple, Boeing and others in a market that's grown sour on buybacks.
«In the past year, companies
repurchasing shares saw an excess weighted cumulative return of -1.9 % relative to the benchmark, while companies not
repurchasing shares saw a return of 9.8 % relative to the benchmark,» Birstingl wrote in his quarterly look
at buybacks.
«We believe the bogey for investors is a 15 percent increase to Apple's total reported capital return number (
shares repurchase plus past dividends), which would imply a $ 150 billion headline number, up from $ 130 billion announced last year,» said Gene Munster, an analyst
at Piper Jaffray, in a recent note.
The gaming giant also announced that during the holiday period, it
repurchased 800,500
shares of stock
at an average price of $ 49.39 for a total of $ 39.5 million.
During the first quarter, the Company
repurchased 56.4 million
shares of common stock
at a total cost of $ 10.8 billion.
Buffett also criticized companies that
repurchase their own
shares at too high a price: «They have in mind a limit as to what they pay for any business they buy except their own, and it has become fashionable to
repurchase shares.»
The company spent heavily on
share repurchases in the first quarter of 2016,
at the height of the fallout from its E. coli scare.
With stocks in general still trading so high, investors are best off ignoring the short - term hype around buyback announcements and instead taking a closer look
at companies on
repurchasing binges to see if their
share prices have more room to run.
These risks and uncertainties include: Gilead's ability to achieve its anticipated full year 2018 financial results; Gilead's ability to sustain growth in revenues for its antiviral and other programs; the risk that private and public payers may be reluctant to provide, or continue to provide, coverage or reimbursement for new products, including Vosevi, Yescarta, Epclusa, Harvoni, Genvoya, Odefsey, Descovy, Biktarvy and Vemlidy ®; austerity measures in European countries that may increase the amount of discount required on Gilead's products; an increase in discounts, chargebacks and rebates due to ongoing contracts and future negotiations with commercial and government payers; a larger than anticipated shift in payer mix to more highly discounted payer segments and geographic regions and decreases in treatment duration; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles which may not mirror patient demand and may cause fluctuations in Gilead's earnings; market
share and price erosion caused by the introduction of generic versions of Viread and Truvada, an uncertain global macroeconomic environment; and potential amendments to the Affordable Care Act or other government action that could have the effect of lowering prices or reducing the number of insured patients; the possibility of unfavorable results from clinical trials involving investigational compounds; Gilead's ability to initiate clinical trials in its currently anticipated timeframes; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead's earnings; Kite's ability to develop and commercialize cell therapies utilizing the zinc finger nuclease technology platform and realize the benefits of the Sangamo partnership; Gilead's ability to submit new drug applications for new product candidates in the timelines currently anticipated; Gilead's ability to receive regulatory approvals in a timely manner or
at all, for new and current products, including Biktarvy; Gilead's ability to successfully commercialize its products, including Biktarvy; the risk that physicians and patients may not see advantages of these products over other therapies and may therefore be reluctant to prescribe the products; Gilead's ability to successfully develop its hematology / oncology and inflammation / respiratory programs; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates, including GS - 9620 and Yescarta in combination with Pfizer's utomilumab; Gilead's ability to pay dividends or complete its
share repurchase program due to changes in its stock price, corporate or other market conditions; fluctuations in the foreign exchange rate of the U.S. dollar that may cause an unfavorable foreign currency exchange impact on Gilead's future revenues and pre-tax earnings; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission (the SEC).
They have a history of returning surplus cash in the form of intelligently - executed
share repurchase plans and / or a dividend that grows
at a rate comfortably in excess of the broader rate of inflation in the economy
Investors should want companies to reinvest in themselves and their employees versus
repurchasing their own stock to increase the
share price, said William Lazonick, an economics professor
at the University of Massachusetts, Lowell, who studies stock buybacks.
Consists of 38,000
shares held of record by The June Bug Lifetime Trust, dtd 3/17/1992, for which Mr. Johnson serves as a trustee, all of which are subject to
repurchase by us
at the original issue price.
Add $ 14 billion of the accelerated
repurchase and I guess you get $ 19 billion in the first four - and - change months of fiscal 2014, which annualizes to... I mean, ISS says «it appears to be on track to
repurchase at least $ 32 billion in
shares» and, sure, that is a number.
Apple's stock buyback program isn't just bigger than those of other companies, it's also better
at doing what investors want
share repurchases to do.
Susan has to
repurchase the
shares at the new higher price so that she can give back what she borrowed, plus she's had to pay dividends the whole time she was trying to short the stock.
According to disclosures published by Grayscale in 2015, the program's
repurchases took place
at the same time that
shares were being created by the trust — in violation of Regulation M.
At current prices, the 250 million
share buyback authorization would represent $ 13.2 billion and through 3Q15, Wells Fargo has
repurchased $ 6.7 billion of common stock, which represents 2.5 % of WFC's market cap.
During the first quarter ended April 30, 2016, TJX
repurchased 5.0 million
shares of its common stock
at a cost of $ 375.0 million.
As you continue to evaluate this opportunity, and consider the right prices
at which to opportunistically
repurchase shares, we hope you give credence to our advice in light of our investment record.
Since the inception of the program through March 31, 2018, Select Medical has
repurchased 35,924,128
shares at a cost of approximately $ 314.7 million, or $ 8.76 per
share, which includes transaction costs.
«Boards that authorise
share -
repurchase initiatives
at market prices below what the businesses are intrinsically worth per
share (without foregoing investment in even more compelling growth opportunities and with due regard for the financial security of the remaining shareholders) are clearly putting the shareholder's interest high on the priority list» Frank Martin
«
Repurchases - is sensible [allocation of capital] for a company when its
shares sell
at a meaningful discount to conservatively calculated intrinsic value.
We look forward to future occasions when we might
repurchase shares of these companies
at favorable prices.
Perhaps if the scheduled 2013 tax changes actually become law and dividends are again taxed
at a premium to long - term capital gains, investors will become more interested in companies that
repurchase their own
shares.
It has been taking on long - term debt with an interest rate
at less than 4 % and using much of these funds to
repurchase shares.
By borrowing money
at less than 4 % and
repurchasing shares that the company pays 5 % on, it is increasing current cash flows while simultaneously reducing
share count.
The Wall Street Journal also recently cited data that S&P 500 companies are
repurchasing shares at a rate of roughly $ 125 billion a quarter this year, which is the lowest level since 2012 and down from an average of $ 142 billion a quarter between 2014 and 2016.
A figure that was subsequently increased
repurchase share at prices no higher than 20 percent premium to book value.
As Bloomberg reported in a June 16th article headlined «The $ 31 Billion Hole in GE's Balance Sheet That Keeps Growing,» GE spent roughly $ 45 billion on
share repurchases in 2015 and 2016 —
at substantially higher stock prices — while a $ 30 billion - plus shortfall was building in its pension plans.
Baupost looks
at every merger, rights offering, privatization of government business, spin off, major
share repurchase, dutch auction tender, thrift conversions or anything else that could cause mispricings.
In addition to liking BMC's products, we liked the company's aggressive
share repurchases and its valuation, which is much lower than the multiple of sales
at which many similar companies have been acquired.
It's disappointing to see the value decline, but I enjoyed the December 2017
repurchase of additional
shares at the lower mark.
- Since 2010, DISCK has deployed $ 8 billion toward buybacks (~ 50 % of its current market cap)-- reducing diluted
shares outstanding by over 30 % — including $ 1.4 billion utilized in 2016 to
repurchase ~ 53 million
shares at an average cost of ~ $ 26 a
share.
Share Repurchase Program During the second quarter of 2014, the company repurchased 936,060 shares of its common stock at an average price of $ 55.56 per share for a total of approximately $ 52 mil
Share Repurchase Program During the second quarter of 2014, the company
repurchased 936,060
shares of its common stock
at an average price of $ 55.56 per
share for a total of approximately $ 52 mil
share for a total of approximately $ 52 million.
As well as missing revenue forecasts, Alibaba announced a $ 4 billion
share repurchase program over two years, which it said was primarily aimed
at offsetting the impact of the company's
share - based compensation programs and other factors that could dilute the
share price.
The company
repurchased 1,033,705
shares of its common stock
at an average price of $ 66.21 per
share for a total of over $ 68.4 million.
During the third quarter of 2014, the company
repurchased 787,796
shares of its common stock
at an average price of $ 58.02 per
share for a total of nearly $ 46 million under its
share repurchase program.
Under prior plans, we
repurchased 1,134,966
shares at a total cost of $ 100.0 million during 2017 and 1,485,493
shares at a total cost of $ 100.0 million during 2015.»
«Tactically,
repurchases may lift
share prices in the near term, but in our view it is a questionable use of cash
at the current time when the P / E multiple of the market is so high.»
«On October 24, 2017, our board of directors authorized a $ 150.0 million stock
repurchase program, allowing us to
repurchase shares of our common stock over a two - year period from time to time
at various prices in the open market or through private transactions.